Not all flipped homes are bargains

Expert advice on how to spot a flipped home that's really a flop

A huge backyard and a big master bath sold Marlene on this home when she was on the hunt for the perfect house, but she realized pretty quickly that her dream home came with a few nightmares.

"The dishwasher was installed improperly. The microwave blew up. There's a leak in the wall in the master bath next to the shower," she explained.

It turns out Marlene's home was flipped, purchased by an investor, fixed up and then sold quickly for a profit. Flipping is up more than 50% over last year, and recent trends show it's especially hot in higher end homes.

"There's a lot of distressed properties that these flippers can purchase up at a discount and then turn around and because of the rapidly rising home prices, catch that, that wave and profit," he said.

So, exactly who is doing the flipping? In addition to "mom and pop" investors and construction and remodeling professionals, institutional investors backed by wall street or foreign investors are jumping in on the action.

"That's a new element we haven't seen before and is kind of creating an assembly line in some cases out of, out of flipping properties," explained Blomquist.

No matter who the flipper is, buyers like Marlene warn what you see is not always what you get when it comes these properties.

President of the American Society of Home Inspectors, Bill Jacques, cautions prospective buyers to beware.

"You never know if somebody's just going in and sort of putting in a coat a paint, putting in some new carpet, maybe putting in a new appliance," warned Jacques. "In a lot of cases there really needs to be a little more extensive work done."

"With a flip, you want to have an inspector come in and pay very close attention to the quality of the work that's been done on that home," said Blomquist.

Experts say be sure to check the 'bones' of the home, including its foundation, the framing and the crawl space. And, despite these new warnings, "flipped" isn't necessarily a dirty word.

"These flippers pride themselves, many of them, in, in doing a great job," said Blomquist.

"A lot of homes are really good deals," added Jacques. "Everything's been done correctly. And then there are the homes that people just take short cuts."

It's also smart to get a home warranty in many cases. Marlene, regrets not doing that, since she says shortcuts are costing her money now.

"It sounded like somebody had taken the time to lovingly remodel it," said Marlene. "Unfortunately, that was more- probably more our fantasy than the reality."

If you want to know if a home you're considering buying has been flipped, ask your realtor to check the sales history.